Why Rent To Own Homes Programs May Be A Good Option For You

By Author: Sunil Punjabi
Total Articles: 2565
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Also called "lease to own", Rent To Own Homes means that you can live in it and pay the owner a monthly sum, or rent until your financing is clear, or your own home sells. In a situation where you don't qualify for a mortgage, this is one way to get into a new home, and pay a monthly amount for a period of a few years, at which time you will be able to finance the purchase with a home loan. Three years is usually the normal amount of time.

A contract must be drawn up between you and the seller of the Rent To Own Home. Both parties must agree on the terms. There can be advantages and disadvantages to purchasing a home this way. If you, as the renter, find anything wrong with the home while you are living there, you have the option of foregoing the deal. Granted, you will lose the rent monies you have paid, and any money you have paid as a deposit, or upfront option fee, which, depending on the amount of interest you are being charged can add up to a considerable amount. This money is intended as a down payment on the home, and it might be quite difficult to come up with such a large amount before you lease ...
... or rent the home.

Your contract will probably state that your rent has to be paid by a specified date each month or that month's rent credit may be forfeited if you are late by even one day. You absolutely have to pay the rent on time every month. Think of the money you will lose if you are late 3 or 4 times a year. If your rent payment on the Rent To Own Home is $1500 a month, being late even twice can cost you $3000 that you will have lost on your down payment. So make sure you are never late with the payment. Ever.

During the rental period, you are the person responsible for any and all repairs and maintenance to the home. This means that even though you are technically 'renting' the home, there is no landlord you can call if anything goes wrong, breaks, or malfunctions. The Rent To Own Home needs to be maintained by you. So if the roof leaks, an appliance dies, plumbing backs up, or mice take up residence in the home, it's your problem. Think about all these things before you sign that contract.

The seller has certain advantages at his disposal, also. He will be able to set a higher price for purchase on the home, even though the housing market is at an all time low. People who are looking for a Rent To Own Home will not have many options about price if this is the only way they are able to own a home. If the person who is renting the home suddenly decides to back out, the seller will keep the option fee and any rent that has already been paid. It is very important that both you and the seller read and agree on everything that is in the contract.

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